Company law lecture 2

Obligation to register certain associations, partnerships as companies sec (9)

No association, partnership or entity consisting of more than twenty persons shall be formed for the
purpose of carrying on any business. Any violation of this section shall be an offence punishable
under this section.

A person guilty of an offence under this section shall be liable to a penalty not exceeding of level 1
(the details is given in section 479) on the standard scale and also be personally liable for all the
liabilities.

NAME OF A COMPANY Sections 10, 11, 12, 13.

No company shall be registered by a name which contains such word or expression

a) identical with or resemble or similar to the name of a company;

b) inappropriate; or
c) undesirable; or
d) deceptive; or
e) designed to exploit or offend religious susceptibilities of the people

Except with prior approval in writing of the Commission

a) the patronage of any past or present head of state
b) any connection with the Federal Government or a Provincial
c) any connection with any corporation set up by or under any Federal or Provincial law;
d) the patronage of, or any connection with, any foreign Government or any international
organisation;
e) establishing a modaraba management company
f) any other business requiring licence from the Commission.
decision of the Commission shall be final regarding a name of a company
an application can be given to the registrar for reservation of a name for a period not exceeding sixty
days.
the aggrieved person may within thirty days of the order of refusal of the application prefer an
appeal to the Commission.
Rectification of name of a company.
A company which, through inadvertence or otherwise, is registered by a name in contravention of
the provisions
(a) may, with approval of the registrar, change its name; and
(b) shall, if the registrar so directs, within thirty days of receipt of such direction, change its name
using previous name after the name has been changed by the registrar, shall be liable to a
penalty of level 1 on the standard scale.
Change of name by a company
A company may, by special resolution and with approval of the registrar signified in writing, change
its name
Where a company changes its name the registrar shall enter the new name on the register in place of
the former name, and shall issue a certificate of incorporation.

Where a company changes its name it shall, for a period of ninety days from the date of issue of a
certificate continue to mention its former name along with its new name on the outside of every
office or place in which its business is carried on.
Meaning of Promotion

Promotion is the stage where individuals or a group of individuals (promoters) conceive the idea of
forming a company, conduct feasibility studies, identify resources (financial, technical, etc.), and take
the necessary steps to bring the company into existence

Promoters

Promoters play a crucial role in establishing a company right from its inception stage. An individual or
a group of people who come up with the concept of starting a business are the promoters of a
company. They carry out the required processes to establish the firm

According to companies act 2017 “promoter” means a person—

(a) who is named as a subscriber to the memorandum of association of a company; or

(b) who has been named as such in a prospectus; or

(c) who has control over affairs of the company, directly or indirectly whether as a shareholder,
director or otherwise; or

(d) in accordance with whose advice, directions or instructions the board of the company is
accustomed to act:

 Role of Promoters:

Promoters play a crucial role in the process of forming a company. They are the individuals who
initiate the process of company formation and are responsible for taking all the necessary steps to
bring the company into existence.

 Key Activities During Promotion:

 Identifying the Business Idea: Promoters identify a viable business opportunity and
develop a business plan.

 Conducting Feasibility Studies: They assess the market potential, financial viability,
and technical aspects of the proposed business.

 Securing Resources: Promoters secure the necessary financial, technical, and other
resources to set up the company.

 Drafting the Memorandum and Articles of Association: They draft the

Memorandum of Association (MoA) and Articles of Association (AoA), which are the
fundamental documents of the company.

 Obtaining Necessary Approvals: Promoters obtain the necessary approvals from

regulatory authorities, such as SECP.

 Registering the Company: They ensure that the company is registered with the
Registrar of Companies (RoC).

REGISTRATION OF COMPANY (sec 16)

There shall be filed with the registrar an application on the specified form containing the following
information and documents for incorporation of a company, namely:—
 A. a declaration on the specified form, by an authorized person named in the articles as a
director, of compliance with all or any of the requirements of this Act and the rules and
regulations made there under in respect of registration
B. memorandum of association of the proposed company signed by all subscribers, duly
witnessed and dated;
C. there may, in the case of a company limited by shares and there shall, in the case of a
company limited by guarantee or an unlimited company, be the articles of association signed
by the subscribers duly witnessed and dated
D. an address for correspondence till its registered office is established and notified.

(2) Where there is any document or information contains any matter contrary to law or does not
otherwise comply with the requirements of law, the registrar may either require the company to file
a revised document or remove the defects or deficiencies within the specified period.

(3) Where the applicant fails to remove the deficiencies conveyed within the specified period, the
registrar may refuse registration of the company.

(4) If the registrar is satisfied that all the requirements of this Act and the rules or regulations made
thereunder have been complied with, he shall register the memorandum and other documents
delivered to him.

(5) On registration of the memorandum of a company, the registrar shall issue a certificate that the
company is incorporated.

(6) The certificate of incorporation shall state—

(a) the name and registration number of the company;

(b) the date of its incorporation;

(c) whether it is a private or a public company;

(d) whether it is a limited or unlimited company; and

(e) if it is limited, whether it is limited by shares or limited by guarantee.

(7) The certificate shall be signed by the registrar or authenticated by the registrar’s official seal.

(8) The certificate shall be conclusive evidence that the requirements of this Act as to registration
have been complied with and that the company is duly registered under this Act.

(9) If registration of the memorandum is refused, the subscribers of the memorandum or any one of
them authorised by them in writing may, within thirty days of the order of refusal, prefer an appeal
to the Commission.

(10) An order of the Commission shall be final and shall not be called in question before any court or
other authority.

Next lecture InshaAllah will be on Memorandum of Association and Article of Association. Thanks